RE: How Boohoo is a 100 Bagger from here21 Mar 2021 11:10
Top-management teams that make good capital decisions about how to invest company resources and an entrepreneurial founder Chairman Mahmud Kamani and founder Director Carol Kane involved. These overcome the growth hurdle.
Founder Chairman Mahmud Kamani has most of his own personal wealth invested in Boohoo.
A constant desire to grow the business is a key characteristic for a 100 Bagger .
It is those who can best manage change that survive as companies and become 100 baggers.
If a business earns 20% on capital, ROCE, return on capital employed, even if you pay an expensive looking price, you'll end up with a fine result. Boohoo has earned more than 20% on capital, ROCE, for the past 5 years.
Return on equity of 15% or more in most years is a sign of a 100 Bagger. Boohoo have earned over 20% return on equity for the past 5 years. If an off year return on equity is 10% and a more than excellent year is 30% then that counts as a 20% average return on equity.
The ability to reinvest profits and earn a high return on equity is essential for a 100 Bagger.
How a business invests the cash the business generates is essential for growth which is essential for a 100 bagger.
Founder Chairmen make good decisions and never take huge risks that would damage the business. People with their own wealth at risk make better decisions for their business. It really comes down to the people running the business.
Entrepreneurial instinct is needed for 100 baggers. 100 baggers need entrepreneurial talent with persistence to grow the business.
Founder Chairmen with most of their wealth invested in the business are a predictor of future growth and outperformance.
If a business starts with a high gross margin then it tends to keep it. Boohooβs gross margin has been as high as something like 56.2%. Anything over 50% is classed as excellent.
A moat is having a higher gross margin to a competitor. Boohoo's gross margin has always been higher than Asos's gross margin.
Paying attention to charts or to the Β£ or whatever are just distractions to 100 baggers.
Investing in 100 baggers means having your feet firmly on the ground, standing still, holding the share through every up and down, not letting boredom with the share price make you do something stupid.
Don't spend time chasing returns, focus on holding the share, don't chase other shares that are moving up because that will get you into trouble.
Don't play the guessing game, focus on holding the share and the money it'll make.
The best inflation fighters are 100 baggers so don't worry about inflation.
Those who can't open their mind to Boohoo being a 100 bagger from here, are simply fixed in their ideas and will never open their minds to this.